- Mensalão scandal
The Mensalão scandal (Portuguese: Escândalo do Mensalão, IPA: [mẽsaˈlɐ̃w̃]) took place in Brazil in 2005 and threatened to bring down the government of Luiz Inácio Lula da Silva. Mensalão is a neologism and variant of the word for "big monthly payment" (salário mensal or mensalidade). The scandal began when on June 6, 2005, the Brazilian Congressional Deputy Roberto Jefferson told the Brazilian newspaper Folha de São Paulo that the ruling Partido dos Trabalhadores (PT) had paid a number of Congressional deputies thirty thousand reais (around US$12,000 at the time) every month in order to vote for legislation favored by the ruling party. The funds were said to originate from state-owned companies' advertising budgets, funneled through an advertising agency owned by Marcos Valério. Many key advisers to president Lula resigned, while several deputies were faced with the choice of resignation or expulsion from congress, though the president himself went on to be re-elected in 2006. The scandal also sparked unproved charges of illegal campaign contributions from Cuba and the Revolutionary Armed Forces of Colombia and political connections to the assassination of Celso Daniel, mayor of the city of Santo André.
On September 18, 2004, the major Brazilian weekly magazine Veja printed a cover story entitled, "The scandal of the purchase of the PTB by the PT". The article described the development of the alliance between the Workers Party (PT) and the Brazilian Labour Party (PTB). According to the magazine, the Workers' Party had promised that it would pay R$150,000 to each PTB congressional deputy if they would give their support to the Executive. Allegedly, because these promises were not fulfilled, a storm of allegations of corruption against the PT began to appear in May 2005.
On September 24, 2004, the Rio de Janeiro newspaper Jornal do Brasil published the story: "Miro denounces bribery in Congress". The article cited Veja and claimed that the former Minister of Communications Miro Teixeira had revealed the existence of the monthly payments to the Public Prosecution Ministry.
On September 25, 2004, the Jornal do Brasil published another story claiming that the President of the Brazilian Chamber of Deputies João Paulo Cunha (PT) had promised that he would fully investigate the claims. According to the newspaper, the President of PPS Roberto Freire commented: "This subject has been circulating for months in Congress but nobody has the courage to approach it."
The scandal arises
On May 14, 2005, Veja published a new story describing an apparent corruption scheme in the Brazilian Postal Service. The magazine described the content of a 110 minute video tape recording, made with a hidden camera, which showed former Post Office Chief Maurício Marinho involved in an apparent bribe negotiation with a businessman. The full bribery scheme involving government contracts would be administered by the Post Office administration director Antônio Osório Batista and by the Post Office manager and Congressional deputy Roberto Jefferson (PTB).
In the tape, Marinho receives and then pockets R$3,000 (about 1,259 USD) in cash. The recording was aired by the major Brazilian television stations.
Agents from the Brazilian Intelligence Agency (ABIN) took part in investigating the Post Office case. As the scandal developed this involvement was argued to be linked to an attempt to destroy the PT's former allies without the scandal exploding upon the government.
However, a major political battle began when the government tried to systematically obstruct the installation of a Parliamentary Commission of Investigation (CPI) to investigate the growing corruption scandal.
On June 3, 2005 the newspaper Folha de São Paulo published the story claiming that the government was tying funds to various projects to support of the installation of the CPI.
Because of these claims, part of the government's base joined the opposition to support the installation of a Parliamentary Commission of Investigation. Abandoned by his allies, Jefferson began to counterattack. On June 6, the newspaper Folha de São Paulo published an interview with Jefferson. Jefferson claimed that Delúbio Soares, the treasurer of Workers' Party, was administering a monthly payment of R$ 30 thousand to certain Congressional deputies, in order to influence them to vote with the government.
Roberto Jefferson claimed that those who received the monthly payment called it mensalão, a derivation of the word in Portuguese for monthly payment. The word "mensalão" quickly became the adopted popular label for the scandal, now identified as the "escândalo do mensalão."
According to Jefferson, the operator of the payment scheme was the businessman Marcos Valério de Souza, one of the owners of the advertising agencies SMP&B and DNA, which had large contracts with the government.
After the installation of the Investigation Commission the government allegedly tried to control the commission by installing allies Senator Delcídio Amaral (PT) as President and Deputy Osmar Serraglio (PMDB) as the key reporter.
Although the Congressional Commission of Investigation for the Post Office scandal subject was officially restricted to the investigation of irregularities in the Post Office administration, it began to investigate the expanding monthly payment claims because of the apparent connections between the cases.
An additional commission for the broader scandal was officially installed on July 20. Allies of the government occupy the key posts; the President of the CPI is the Senator Amir Lando and the reporter (responsible for writing the final report) the Deputy Ibrahim Abi-Ackel. Abi-Ackel was minister of justice in the government of João Baptista Figueiredo, and he was also accused of involvement in a corruption scandal.
José Dirceu was a rebel fighter against right wing military dictatorship establish on 1964, arrested in 68, he was liberated as one of the political prisoners released at the request of the kidnapers of Ambassador of the United States and took a flight to Cuba from where he came back to Brazil after having changed his face with a plastic surgery. While back in Brazil he hides in a small place in State of Paraná and played the role of a shop owner. During all this time he has not engaged in any guerrilla action, he was a student union leader. He married a girl and didn't tell her his true identity even after having a son with her, only after 1979 when a political amnesty was declared, and then he reengaged his open political life, fighting for democratic presidential elections and the end of the dictatorship regime. Dirceu was ousted from the position as Chief of Staff of President Lula as the consequence of a scandal resulting from his participation in a corrupt group nicknamed by Lula as the “aloprados” (the mad-dog gang).
The scandal's development
In early July, an advisor to Congressional deputy and brother of Workers’ Party President José Genoíno, was seized at an airport with $100,000 in his underwear and additional funds in his luggage. The wives and secretaries of key figures testified in the numerous and overlapping Congressional panels, including Valério's secretary, Fernanda Karina Somaggio, and the ex-wife of Valdemar Costa Neto, Maria Christina Mendes Caldeira. The Congressional hearings were often marked by fiery rhetoric and emotional outbursts, including numerous incidents of crying by witnesses and Workers' Party deputies. Although still murky and unclear, reported links between the scandal, its key figures, and the murder of Santo André's mayor Celso Daniel and various mafia and criminal figures have only intensified its sensational tone and societal impact.
One key event that broadened the scandal into more of a general investigation of the Workers' Party history as whole was the sudden testimony of Duda Mendonça, public relations specialist and campaign manager for Lula's 2002 campaign, on August 11. He claimed that he was paid using off-shore bank accounts and possibly illegal funds connected to Valério.
The scandal, which had at that time not yet involved Brazil's finance minister who is often claimed to be popular with the international finance community, threatened Antonio Palocci's standing after lawyer and former advisor Rogério Tadeu Buratti testified that Palocci was involved in corrupt activities while mayor of Ribeirão Preto in the mid-90's.
Although Lula's popularity waxed and waned, no definite proof emerged that he orchestrated or had knowledge of any monthly payments. Most of the PT's leadership was affected in some way, with many resigning or failing to win re-election. Brazil's economy was widely perceived as not having been substantially impacted by the scandal.
Roberto Jefferson, who initially sparked the scandal, was expelled from the Chamber of Deputies on September 14, 2005 for ethical violations determined by the Congressional Council of Ethics. Despite continued resignations from figure involved, in October the scandal died down somewhat as Brazil had a referendum on gun sales that resulted in a loss for the government's position. At the end of October, Veja published a new story claiming that the Workers' Party had received illegal campaign funds from Cuba—threatening to re-intensify the scandal once again, though that was not ultimately the case.
First joint preliminary CPI report
The Post Office and Vote Buying parliamentary commissions of investigation unanimously approved their first joint preliminary report on September 1, 2005.
The report accused 18 Brazilian deputies of involvement in the corruption scandal:
- Carlos Rodrigues (PL-Rio de Janeiro)
- José Janene (PP-Paraná)
- Pedro Corrêa (PP-Pernambuco)
- Pedro Henry (PP-Mato Grosso do Sul)
- Sandro Mabel (PL-Goiás)
- João Magno (PT-Minas Gerais)
- João Paulo Cunha (PT-São Paulo)
- José Borba (PMDB-Paraná)
- Josias Gomes da Silva (PT-Bahia)
- Paulo Rocha (PT-Bahia)
- Professor Luizinho (PT-São Paulo)
- Vadão Gomes (PP-São Paulo)
- Vanderval Santos (PL-São Paulo)
- José Mentor (PT-São Paulo)
- Roberto Brant (PFL-Minas Gerais)
- José Dirceu (PT-São Paulo)
- Roberto Jefferson (PTB-Rio de Janeiro)
In the report they are accused of misdeeds including illegal campaign finance activities, placing cronies in strategic positions in government enterprises and receiving kickbacks in return, and receiving cash payments in exchange for voting with the government in the Brazilian Congress.
In regard to the claims initially made by deputy Roberto Jefferson (PTB) the report states:
- Everything he said that could be investigated was revealed to appear to be valid, including his own confessions.
- Everything he said when compared to other testimonies showed a great degree of validity.
The report stated that several documents were identified and validated proving that large sums of money were withdrawn from agencies of the Rural Bank in Brasilia and Belo Horizonte, as well as from the bank accounts of the enterprises SMPB and DNA. According to the documents, the beneficiaries were federal deputies who received funds in person or through relatives, advisers, or individuals chosen by Marcos Valério.
The report affirmed that it was possible that some payments were made on a monthly basis and others more or less frequently. The presence of the scheme at all, however, was to deemed to be of greater importance than the timing of the payments.
The editors of the CPI report called the defense made by some parliamentarians that the funds were used to settle debts from electoral campaigns a "lame excuse".
Timing of key withdrawals and votes
Documents from the Council for Control of Financial Activities (Conselho de Controle de Atividades Financeiras [Coaf]) indicate that between July and May 2003, withdrawals of 27 million reais were made from the accounts of businessman Marcos Valério.
According to deputy Roberto Jefferson, the money for the mensalão came from Banco Rural and the Banco do Brasil. Documents from Coaf validate the withdrawals from Banco Rural; the withdrawals from the Banco do Brasil have not yet been traced.
The table below shows a side-by-side description of some of the withdrawals and connected votes in the Chamber of Deputies and Senate of Brazil.
Withdrawals that Possibly Connected Votes in the Legislative Vote Withdrawal Tax reform approved, September 24, 2003 R$ 1.212 million between September 23, 25, and 26, 2003 Modified Tax reform bill in Senate, December 17, 2003 R$ 470 thousand between December 17 and 19, 2003 Provisional measure for the minimum wage approved in the House, June 2, 2004 R$ 500 thousand Provisional measure for minimum wage approved June 23 in the House after being passed in the Senate R$ 200 thousand Status of the Central Bank President, December 1, 2004 (House) R$ 480 thousand on November 29 and 30, 2004 Bingo reform approved, March 30, 2004 (House) R$ 200 thousand on March 29, 2004 Social Security reform approved (first round, House), August 5, 2003 R$ 200 thousand on August 6, 2003 Social Security reform approved (second round, House), August 27, 2003 R$ 200 thousand between August 25 and 26 Social Security reform approved (Senate), November 26, 2003 R$ 400 thousand November 26 and 26, 2003 Social Security reform approved (Senate, second round), December 11, 2003 R$ 120 thousand, December 10, 2003
Principal figures in the scandal
- José Dirceu, accused by Jefferson to be the head of the scheme
- José Genoíno, President of the PT, suspected in relationship to money found in the underwear of the adviser to his brother, the deputy José Guimarães
- Delúbio Soares, Treasurer of the PT
- Marcelo Sereno, National leader of PT
- Silvio Pereira, National leader PT, received a Land Rover from a supplier to Petrobras
- João Paulo Cunha (PT-São Paulo) - Ex-president of the House. His wife was identified by people visiting the Banco Rural in Brasília
- Paulo Rocha (PT-Pará) - Ex-leader of the PT in the House. An adviser of his was seen outside of the Banco Rural.
- Professor Luizinho (PT-São Paulo) - Ex-leader of the government in the House, had an adviser who received R$ 20 mil from Marcos Valério.
- José Mentor (PT-São Paulo) - His office received R$ 60 from a Banco Rural account of Marcos Valério
- José Nobre Guimarães (PT-Ceará) - Brother of party chief José Genuíno. His adviser was found with US$ 100,000.00 in his underwear and R$ 200,000.00 in a suitcase. Guimarães was also accused of receiving R$ 250,000.00 from the accounts of Marcos Valério.
- José Adalberto Vieira da Silva (PT-Ceará) adviser to José Nobre Guimarães, found with hidden money in his underpants.
- Josias Gomes (PT-Bahia) - suspected of personally withdrawing R$ 100 thousands from the accounts of Marcos Valério.
- Luiz Gushiken, ex-communication secretary, accused of issues relating to his former firms
These figures are members of other parties that gave political support to the Workers' Party before the scandal: PTB, PP, PL, and the PMDB.
- Roberto Jefferson (PTB-Rio de Janeiro) - Deputy who sparked the scandal with his initial allegations. Accused of operating a corruption scheme using state enterprises and the Post Office. Also accused of receiving millions of dollars from Marcos Valério to assist the PTB without declaring it to the electoral authorities.
- José Carlos Martinez (PTB-Paraná) - Deputy who has already died. Accused of receiving R$ 1,000,000.00
- José Janene (PP-Paraná) - Cited by Jefferson since the start of the scandal. Accused of distributing the Mensalão to the parliamentary group of the PP. His involvement was confirmed in testimony by his advisor João Cláudio Genu to the Federal Police, who confessed to making the withdrawals and delivering the money to the treasury of the PP.
- Pedro Corrêa (PP-Pernambuco) - President of the PP, also accused by Jefferson and incriminated by Genu.
- Pedro Henry (PP-Mato Grosso) - Ex-leader of the House, also implicated in the testimony of Genu.
- José Borba (PMDB-Paraná) - Ex-leader of the PMDB in the House. Is accused of receiving R$ 2.1 million by the financial director of Valério's firm SMPB, but of refusing to sign the receipt for the withdrawal (forcing an employee of SMPB to go to the bank branch to release the payment)
- Valdemar Costa Neto (PL-São Paulo) - Accused of being the distributor of the Mensalão to the bench of the PL. His ex-treasurer, Jacinto Lamas, is accused of being the main beneficiery listed in the withdrawals from the accounts of Marcos Valério in Banco Rural, receiving R$ 10,837,500. To avoid the process of removal from Congress, on August 1 he resigned before an inquiry could be opened.
- Bishop Rodrigues (PL-Rio de Janeiro) - Coordinated the grouping of members of the Universal Church of the Kingdom of God in the House. Accused of receiving R$ 150,000. Was afterwards expelled from the church.
- Anderson Adauto (PL-Minas Gerais) - Ex-Minister of Transportation, accused of receiving, through the intermediary of his cabinet chief, one million reals from Marcos Valério.
- Eduardo Azeredo - (PSDB-Minas Gerais). Not accused of involvement in the mensalão, he is accused of receiving money from Marcos Valério to be used in an off-book accounting scheme for campaign for the Governor of Minas Gerais in 1998. In response to this accusations, in hope to preserve his party's reputation, Azeredo leaves his position as PSDB's national president in October, 2005.
- Roberto Brant - Deputy of the PFL from Minas Gerais who is accused of having received funds from Valerio. The fact that Brant who is a member of a party opposed to the government is notable. Brant argued that the money he received was from the business Usiminas, which was not declared as an official donor. Valério denied the claim and Usiminas refused to comment.
- Marcos Valério - Businessman. Accused of being the operator of the "mensalão", he supposedly operated several public relations firms and advertising agencies whose bank accounts were used to distribute funds to members of the Workers' Party and other allied Brazilian parties. He is also accused of participating of Eduardo Azeredo's off-book accounting.
- Duda Mendonça - Campaign manager and public relations specialist who led Lula Presidential campaign. His partner, Zilmar da Silveira, appears as a recipient of funds from Marcos Valério (R$ 15,500,000.00).
- Fernanda Karina Somaggio - Secretary of Marcos Valério. Her datebook was seized by the Federal Police. She confirmed the Valério's connection to Delúbio Soares and with other deputies accused of involvement in the corruption scheme. Also charged that payments were made with suitcases filled with money.
- Renilda Soares - Valério's wife. Accused José Dirceu of having full knowledge of the corruption scheme.
- Toninho da Barcelona - also known as Antonio Oliveira Claramunt. One of the principal Brazil foreign exchange specialists. Arrested for illegal financial activities, he alleged that he did various exchanges for the PT and other parties. He claimed the PT maintained a secret foreign bank account.
- Rogério Buratti - ex-advisor to Antonio Palocci. Arrested by police on August 16, 2005. He is accused of participating in fraud in contracts between the local district of Ribeirão Preto and garbage collection firms, money laundering, and extortion. Claimed that during the administration of Antonio Palocci there was a corruption scheme to divert funds to the Workes' Party.
- Sérgio Gomes da Silva, "the Shadow" - Businessman and ex-body guard for the mayor of Santo André Celso Daniel. He is accused of having ordered the assassination of the mayor.
- Maria Christina Mendes Caldeira - ex-wife of the deputy Valdemar Costa Neto. Accused her former husband of receiving the mensalão and of receiving an irregular donation from Taiwanese businessmen.
Major businesses involved
- Instituto de Resseguros do Brasil (IRB)
- Empresa Brasileira de Correios e Telégrafos (EBCT)
- Guaranhuns (front company)
- DNA (business of Marcos Valério)
- SMP&B (business of Marcos Valério, Cristiano Paz and Ramon Cardoso)
- Banco Rural: used by Marcos Valério for his operations
- Banco do Brasil: used by Marcos Valério for his operations
- Banco BMG: used by Marcos Valério for his operations
The local branches or subsidiaries of the following Portugal-based multinational companies were allegedly involved:
- Bank of Beacon Hill: used by Marcos Valério for his operations
Congressional Committees of Investigation (CPIs)
The following CPIs are involved in the investigation of issues that are related to the overall Cash-for-Vote scandal. 
- Post Office CPI: Created June 9, 2005 to investigate alleged irregularities and corruption in the Brazilian Post Office. After the claims by Deputy Roberto Jefferson, this CPI began investigation into the alleged payments made to Brazilian deputies by the ruling party. The termination of the committee's work is scheduled for February 21, 2006.
- Bingo CPI: Created on June 19, 2005 to investigate the use of houses of Bingo gambling for money laundering and the relationship between these houses and organized crime. The CPI was proposed after a tape revealed that the Waldomiro Diniz (an advisor to the Minister José Dirceu) was apparently extorting the gambling mafia of Rio de Janeiro to gain funds for Workers' Party political campaigns. The termination of the committee's work is scheduled for October 26, 2005.
- Vote Buying CPI: Created July 20, 2005 to investigate the alleged monthly payments to deputies. The Workers' Party requests a parallel investigation of the electoral reform to allow a second term for ex-President Fernando Henrique Cardoso (PSDB). The termination of the committee's work is scheduled for November 16, 2005.
Also there was a movement instigated by members of opposition in order to create a fourth CPI to investigate off-book accounts in all parties' during the most recent elections. Due to serial allegations of the occurring of this kind of operation in many politicians' campaigns in 2002, including President Lula's, many believed this CPI could result in a legal and concrete reason to start his impeachment process. However this process was aborted.
The council of Ethics and Parliamentary Decorum of the House is the organ responsible for processing and disciplining members for behavior not in concordance with Parliamentary Decorum.
In order to expel a deputy, 257 votes out of 513 are needed. If expelled, in addition to losing his seat in the Congress and parliamentary privileges and immunity, the member can be barred from holding any public office for eight years. Jefferson will be prohibited from running for office again until 2015.  
Supreme Court Indictment
On August 24, 2007, the Supreme Federal Tribunal, responsible for judging criminal proceedings against parliamentarians due to parliamentary immunity, accepted the indictments of 40 individuals relating to the Mensalão scandal, most which are former or current federal deputies, all of which were or still allies of Brazilian president Luiz Inácio Lula da Silva.
Timeline of key events
Figures losing their posts as a result of the scandal
- Mauricio Marinho, Post Office Chief, May 14
- The director of the Post Office Administration, Antonio Osório Batista and his immediately assistant Fernando Godoy, May 16
- Luiz Appolonio Neto, President of the IRB, May 21
- The leadership of the Correios and of the IRB, June 7
- The directors of electrical firms: Dimas Fabiano Toledo, Rodrigo Botelho Campos e José Roberto Cesaroni Cury, June 30
- José Dirceu, Presidential Chief of Staff, June 14
- Roberto Jefferson, President of PTB, June 17
- Silvio Pereira, Secretary-General of the PT, July 4
- Delúbio Soares, Treasurer of PT, July 5
- Glenio Guedes, Directory of the Conselho de Recursos do Sistema Financeiro, July 6
- José Adalberto Vieira da Silva, Aide to the deputy José Nobre Guimarães, July 8
- José Nobre Guimarães, Manager of the state directory of the PT-CE, July 9
- José Genoino, President of the Workers' Party (PT), July 9
- Marcelo Sereno, Communication Secretary of the PT, July 9
- Henrique Pizzolato, Director of marketing of the Banco do Brasil, July 10
- Luiz Gushiken, Ministério da Comunicação e Gestão Estratégica was relegated downwards, July 12.
- Luiz Gushiken was downgraded again. Left position as at Secretary of Communication to become an adviser to President Lula, July 21
- Valdemar Costa Neto, Federal deputy and president of the Liberal Party (PL), resigned his mandate, August 1
- Marcio Lacerda, Executive Secretary in the Ministry of National Integration, August 2
- Manoel Severino, President of the Casa da Moeda do Brasil, tendered resignation, August 3
- Danilo de Camargo, Coordinator of the Commission of Ethics in the PT, August 6
- Juscelino Antonio Dourado, Cabinet chief of Finance Minister, September 1
- Lula's scandal-hit ally impeached December 1, 2005.
- "Brazil markets fall on rates, political woes." Reuters. August 18, 2005.
- Vasconcelos, Luciana. "PT's National Committee begs the nation's pardon." Agencia Brasil. August 18, 2005.
- "Lula apologizes but is unconvincing." MercoPress. August 13, 2005.
- Blount, Jeb. "Brazil's Workers' Party Suspends Ex-Treasurer Delubio Soares." Bloomberg. August 7, 2005.
- Franzin, Adriana . "Valerio denies negotiating funds for PT and PTB with Portugal Telecom." Agencia Brasil. August 3, 2005.
- Guerreiro, Gabriela; Lourenço, Iolando; Bennett, Allen. "Dirceu denies everything and says he will not resign" Agencia Brasil. August 3, 2005.
- "Previ Ex-Chairman Questions Telecom Deal With Citigroup-Paper." Dow Jones & Company. July 25, 2005.
- Américo dos Reis, Flávio. "Brazil: Major Bribes-for-Votes Scandal Threatens to Topple Da Silva." Worldpress.org. July 17, 2005.
- Lula defies his accusers, BBC News
- Lula 'sorry' for the scandal, BBC News
- Brazil's Corruption Scandal, Washington Post
- Brazil in crisis The Guardian
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